Platinum

May 25, 2010byJCK Magazine

Platinum to Reach $2,000 in 2010?

In early May, precious metal forecasters announced that platinum prices for the second half of 2010 will continue to edge upward, perhaps as high as $2,000 per ounce (at press time the spot price for platinum was $1,737 per ounce).

According to Johnson Matthey’s Platinum 2010 publication released on May 17, three factors are influencing these rising numbers: continued recovery in the auto market, speculative investment interest in platinum in the form of exchange traded funds or ETF investment, and China’s platinum jewelry consumption.

Right now, speculative investment is a major factor in pushing up the price. “The sentiment on platinum is fairly bullish,” explains Tim Murray, general manager of precious metals marketing for Johnson Matthey. “Speculative interest in platinum can lead to volatility in prices, and it often hinges on the strength of other commodities like gold and oil, and takes into account U.S. dollar strength and other macroeconomic factors.

Platinum for the People

You say platinum and most consumers think pricey. That could change, thanks to a stepped-up campaign from the Platinum Guild International (PGI) to transform the tony metal’s reputation. In its ongoing effort to appeal to jewelry shoppers on a budget, PGI is promoting entry-level platinum styles that retail for $5,000 or less.

Last year, consumer research conducted by PGI revealed that shoppers believed platinum’s price point was unattainable. To combat the metal’s I’m-out-of-your-league image, PGI aims to educate the public through new initiatives such as the Platinum Innovation Challenge–JCK 2010, an international design contest launching at JCK Las Vegas. PGI recently unveiled the Entry Platinum initiative, featuring price-specific platinum products from more than 40 brands, including Tacori and Simon G., at the guild’s annual Editor Preview Day in April.

“To stimulate incremental platinum business, PGI realized the need to make platinum more accessible and more affordable to customers who are coming into retail stores,” says PGI-USA president Huw Daniel. “PGI has shifted its strategic focus in 2010, placing a concentration on entry platinum price points.” —Jennifer Heebner